Wipro shares decline 2% ahead of Q3 FY25 results announcement

Wipro Ltd’s shares traded lower today, down 1.72% at ₹283.10, as the company is to announce its Q3 FY25 results post-market hours. Analysts anticipate a slight decline in revenue and net profit for the quarter ended December 31, 2024. Overnight, the company’s American Depositary Receipts (ADRs) fell by 4% in US trading.

Key Expectations:

• Net Profit: Forecasted to drop 5% QoQ to ₹3,040 crore (Q2 FY25: ₹3,209 crore).
• Revenue: Expected to decline by 0.9% in constant currency (CC) terms and 1.5% in dollar terms, impacted by cross-currency headwinds and seasonal factors.
• EBIT Margin: Likely to contract by 40 basis points QoQ to 16.1%.

Factors Influencing Q3 Performance:

1. Seasonal Weakness: Higher furloughs and consulting business seasonality may weigh on earnings.
2. Client-Specific Issues: Growth challenges in BFSI and Healthcare verticals may persist from Q2.
3. Cross-Currency Impact: Expected to affect CC and dollar revenue growth.
4. Wage Hikes: Full impact of September 2024 wage hikes to reflect in Q3.

Investors remain cautious, awaiting management’s commentary on demand trends, capital allocation, and guidance for Q4 FY25. Wipro’s guidance for Q4 is expected to fall within the range of -1% to +1% sequential growth in CC terms.

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